President Donald Trump has reached his commercial deadline with a blow – a series of orders that add tariffs from 10% to 50% on many nations and their goods.
Its biggest objectives are Canada (35%), Brazil (50%) and the goods that a seller bought from a third country, such as China, then sold in the United States like their own (40%).
The cascade of new prices or taxes on imported goods will probably increase prices for American consumers and businesses. So far, these prices have not stopped economic growth. But economists expect the new and higher prices to accelerate the current gradual slowdown in the economy.
Why we wrote this
After an era that pushed the world towards the opening of trade, the United States under President Trump impose higher prices from Canada to South Korea. Its bilateral blinder has obtained promises of new investments in America, but prices are ready to increase.
After a long era in which the United States pushed the world to a more open trade in multilateral talks, Trump has rebuilt trade policy around the bilateral ball, taking advantage of America’s economic power as a negotiation tool. He has obtained major investment promises in the United States of several nations and the European Union. A goal is a boom in American factories.
But greater prosperity for the nation is far from certain.
Although many investors are relieved that prices seem to settle at lower levels than President Trump has threatened in April, uncertainties remain. Negotiations continue with certain key business partners. In addition, “sectoral” prices on specific industries, such as computer flea, can still be to come.
The greatest uncertainty can be legal. A panel of federal judges of the Court of Appeal expressed skepticism on Thursday that Trump could impose large prices without the approval of the congress. The rejection of the legal justification of the administration for non -sectoral and country prices by country could blunt a large part of the president’s wide price offensive.
Thursday, when his self-imposed deadline of August 1 to conclude agreements approached, Trump announced that the new imports were targeting various nations which missed the deadline. They include Taiwan (20%), Switzerland (39%), Laos (40%) and Syria (41%). He had already targeted India (25%). But he also pointed out a certain flexibility. Most of the new prices will not take effect until August 7, giving nations a small window to reach an agreement.
The president has also exempted certain gross copper products – such as copper scrap – of its 50% rate on imported metal. More importantly, he announced an extension of 90 days for current talks with Mexico after a telephone call with Mexican President Claudia Sheinbaum.
“More and more, we get to know each other and understand ourselves,” Trump published on his Truth social network.
This extension of Mexico is isolates Canada as the only American trading partner among the first five United States without any negotiation or prices guarantee after the deadline today.
Chris Young / The Canadian Press / AP
Canadian national pride has shown since President Trump suggested that the nation became the 51st American state. Now Canadian Prime Minister Mark Carney is struggling to accept everything that might seem to voters at home to be a concession to Mr. Trump. Carney announced that Canada would join other nations on Wednesday to recognize a Palestinian state, a decision by Mr. Trump and Israel firmly.
Trump says that he plans to increase the rate rate by Canada’s current 25% to 35%. On the other hand, the European Union, South Korea and Japan have concluded tariff agreements at only 15%. For nations where the United States sells more goods than it buy, the president cracks the basic rate rate at 10%.
Canada, like Mexico, is so deeply rooted in the American car supply chains and other goods that accelerate the risks for American companies. Until now, President Trump has enabled Canadian property to continue to enter the country without increased prices, provided they meet the criteria of the current United States-Mexico-Canade agreement. As long as this exemption is maintained, the global effect of an increase in prices could be stifled.
“I think he will hold,” explains Mary Lovely, a principal researcher at the Peterson Institute for International Economics. Too many American companies would cry if they were deleted.
